The following is the unofficial transcript of a CNBC interview with Small Business Administration 27th Administrator Isabella Casillas Guzman from the CNBC Small Business Playbook event, which took place today, Wednesday, August 2. Video from the interview will be available at cnbc.com/small-business-playbook-events/.
All references must be sourced to the CNBC Small Business Playbook event.
KATE ROGERS: Administrator Guzman, thank you so much for joining us. Great to see you.
ISABELLA CASILLAS GUZMAN: Great to see you, too. It’s my pleasure to be here.
ROGERS: So, we’re going to talk a bit about accessing capital and some challenges and tips for entrepreneurs in order to access that money to grow their businesses. But first, I’d love to talk big picture right now, what’s your pulse on small business in America and how are owners feeling?
GUZMAN: Well, I’ve been traveling across the country both meeting with businesses that have been part of the small business boom, the 12.2 million new business applications who are starting businesses, as well as established businesses across the country. And definitely I’ve sensed a change in the mood. You know, obviously, small businesses have continued to face challenges in the marketplace but they have done an incredible job pivoting, adapting and just facing the challenge day by day. But I’m hearing that inflationary pressures which used to really bog them down are minimizing, as we’re seeing in the numbers. You know, they see opportunities, they’re investing for growth, continuing to work, find workers in this environment, so many of them are, are finally starting to fill those jobs and so they’re feeling hopeful for the future.
ROGERS: That’s great news. Inflation and obviously labor challenges have been so key for owners in this environment. Given the ripples and cracks that we saw in the regional banking system earlier this year, how have small business owners been impacted and what does the capital landscape look like right now?
GUZMAN: Well, for 70 years, and we’re just celebrating SBA’s 70th anniversary, you know, the SBA has been filling those gaps in the marketplace trying to de-risk the capital market so small businesses can get the funding that they need to start and to grow. And right now, when they’re trying to grow their revenues and take advantage of the historic investments in America as part of the President’s agenda, you know, they need capital. And so, we’ve been reforming our programs at the SBA to expand the number of lenders in our system and make sure that the products are simple, easier to navigate through our lending network so that small businesses can connect to whether it’s a small dollar loan, a loan to buy their building or buy more equipment to grow.
ROGERS: Talk to us a little bit more about what the SBA is doing here to ensure that there is more equity when it comes to accessing capital for underserved businesses, minority owned businesses, women owned businesses, etc.
GUZMAN: Yeah, so and especially in this climate that we’ve been discussing, it’s tightening credit, rising interest rates, especially our underserved communities that have been undercapitalized for so long, you know, they need to get access to affordable capital, which is what the SBA strives to do through its lending programs, its investment programs, as well as the as the non-dilutive innovative startup capital that’s available through America seed funds. So we are trying to ensure that there are entry points and access points for all of our small businesses, whether that’s rural where there might be facing banking deserts, or for women and people of color who face barriers historically in the data. So, it’s about creating products that are simpler for lenders to access so that they can reach more small businesses and especially on that small dollar loan size, you know, we see businesses shifting from their garage or their online environment into bricks and mortar, and they are going to need a small capital for that in order to start to get working capital or make those rent payments. And so, we want to make sure that we can give them that boost affordably through the SBA and it’s great lending network.
ROGERS: And I know you’re always traveling around as you mentioned the United States talking to small business owners, what in your travels are you hearing is the biggest headwind right now in terms of capital access at this moment for owners?
GUZMAN: Well, obviously, the the high interest rates because this is what’s a challenge for so many small businesses, they wear so many hats, and are having to, you know, navigate all these issues, knowing, you know, what dollar amount they should be going after, and what type of rates and terms they should be looking for. And that’s what President Biden calls knowing how to know. So we’ve expanded our distribution network of resource partners, those mentors and advisors who can help businesses walk through what the numbers really mean to their bottom line. We want to make sure that as they grow and get growth capital, investment capital that that they’re doing it the right way. And so that’s what our networks there for small businesses so that they can understand what the challenges are and what works for their business today.
ROGERS: You just touched on it a little bit, but for owners who are seeking capital or seeking any type of help with their business and they want to come to the SBA for some guidance, what are the things that they need to know and bring to the agency in order to take that next step?
GUZMAN: Well, President Biden was really firm on the fact that as we invest in America, he wanted to make sure that we could level the playing field and make sure that the economy works for everyone and that includes our small businesses and entrepreneurs. And so, we are really on expanded our network of those advisors and mentors, we now have instead of over 1,200 centers, over 1,600 partners on the ground available through SBA.gov. to help you with issues anything from, you know, how to learn to start up. You, have a great business out in Washington that does pottery and group pottery sessions and she used our mentors to figure out how step by step to start her business. And that same goes for capital when you’re looking for that loan, our lending partners push out millions of dollars every month to help small businesses start to grow their business. And, you know, that expertise is what you need on your team and we provide it through the SBA and have been doing so affordably with free mentors and free advisors to know how to face the challenges and take advantage of these opportunities.
ROGERS: Such great resources for people who are tuning in and want to know how to grow their businesses. You mentioned a few things at the top of the conversation that have been kind of weighing on small business owners right now, inflation being one, supply chain being another the labor situation, which has ebbed and flowed over the last year. From where you stand, what is the single biggest challenge right now for owners in this environment?
GUZMAN: I do think it’s that knowledge and the network of advisers, because, you know, there’s so many as people try to navigate any unknowns or any uncertainty that they feel, you know, despite the data out there that shows that we’re hitting this great recovery, our GDP still is on the upswing last quarter, you know, and we want the small businesses to know how to take advantage of these opportunities. But it is, you know, constantly knowing how to manage to that bottom line as they’re either facing increased work, workforce expenses or challenges in recruiting. Yeah, I know that, that consistently is the message. And the other thing too is that, you know, as we talk about these billions of dollars, hundreds of billions of dollars in investment that’s happening in America, whether that’s in our supply chains in manufacturing as we make in America, or in the clean energy economy of the future, or the infrastructure, those roads and bridges, all of that represents opportunities for small businesses to plug in. So increasingly, we’re getting calls from businesses who want to know how to get that contract to help build that road, or how to take advantage of broadband and go digital once that infrastructure is in place in their community strongly. So I think it’s a mixture of knowing how to manage every day, but also how, knowing how to grow revenues into the future with these opportunities and investments.
ROGERS: Such great points on all of the opportunities ahead for owners. And Administrator, you mentioned it’s the SBA’s 70th anniversary this year, how is the agency shifting and what big changes have you made to meet the needs of owners in our current economic climate and, you know, what are the next 70 years look like for the SBA?
GUZMAN: Well, the SBA scaled dramatically since its 70-year start. We’ve added so many new programs to help businesses compete in the global marketplace. And our, you know, small businesses continued to pivot and adapt and that’s what we expect ourselves to do as well, modify and modernize our programs to make sure that they’re meeting the needs of how businesses are structured, how they’re challenged, and how they want to grow into the future. And so, we’ve reformed across the board. President Biden really has focused on access to capital, making sure that the funding opportunities at the SBA are available to all and that the revenue growth opportunities, the contracting, international trade, growing through digital that we’re providing expertise to our small businesses through this growing network that we’ve funded to help businesses, you know. With the SBA scaling, there’s lessons learned from, you know, putting out $1.2 trillion in relief to save millions of businesses. We know that, you know, customer centric approach, using technology, meeting businesses where they are is how we continue, will be able to grow this economy and small businesses, as you and I agree, are the backbone of the economy, they create two-thirds of net new jobs. The 13.2 million jobs we’ve seen created during President Biden’s term is, is spurred by those great small businesses out there who are doing the hard work that they do every day, coming up with their amazing ideas, jumping in and taking that risk to start and leveraging opportunities in the market.
ROGERS: Administrator Guzman, thank you so much for joining us. Have a great rest of your day.
GUZMAN: Thank you so much.
